24.2.09

Plans announced to cut defamation costs

The government has finally announced that the escalating cost of legal fees in defamation actions will be controlled. This is good news for defendant lawyers and their (predominantly) media clients who have been at the receiving end of many disproportionate settlements in recent years.

The English courts and London have for too long upheld the accolade of being the global capital for libel tourism. We’ve had Saudi plaintiffs suing American papers, foreign film directors evading extradition by giving evidence by videolink and closer to home seen the likes of the Times being hammered with damages and costs for printing the view that a football boss had behaved ‘shabbily’.

To compound the complaints advanced by the press, the spectre of conditional fee arrangements has allowed plaintiff lawyers to levy a success fee, often at premium rates, that can lead to the costs that come with a damages award having an unduly punitive effect on the final bill faced by defendants.

Plaintiffs and their lawyers will no doubt feel that the greater the punishment faced by the press the better. This may have the benefit of deterring them from heinously libeling the innocent. But to the extent the press should be brought to book for outrageous and unsubstantiated libels, they should not be subjected to a threat of costs that could make them hold front pages that the public may have a right to know about.

Rather than have a chilling effect that freezes free speech, there should be a cool wind that blows through newsrooms and reminds editors to keep their stories and sales targets in line with the law.

So it is welcome news that the government has launched a consultation paper that will examine how better controls can be implemented to curb the excessive costs that have crept into defamation litigation over the years. The consultation paper will complement evidence that is due to be heard by the Commons Culture, Media and Sport Select Committee about the effects defamation fees are having on the press.

Justice Minister Bridget Prentice said the new proposals were designed to “bring more effective cost control to litigation in defamation proceedings and to ensure that costs in this area are more proportionate and reasonable”. Their aim is to “ensure that people's right to freedom of expression is not infringed, and media organisations continue to report on matters of public concern" said Prentice.

The government is also considering proposals that would include:• limiting recoverable hourly rates by setting a maximum or fixed rate • compulsory cost-capping or compulsory consideration of cost-capping in each case • requiring the proportionality of total costs to be considered on cost assessments conducted by the court.